What's the news?
The market for new cars in Ireland contracted by 5.5 per cent in the first quarter of 2018, falling to 71,805 registrations. That's down on Q1 2017, which was itself a dismal period for the Irish motor industry, and forecasters are now saying that the total number of new car registrations this year will be 120,000. That figure might only be a handful of sales ahead of used imports - thanks to the continued weakness of Sterling, and the plummeting value of second hand cars in a contracting UK market, the number of imported used cars continues to rise in Ireland. It's up by 9.44 per cent so far this year, and the total number of used imports is forecast to hit 107,000 by the end of 2018.
Of those new cars registered so far this year, 56 per cent have been powered by diesel, a drop-off from the 66 per cent in the same period last year. Petrol car sales have risen to 37 per cent of sales (up from 29 per cent last year) while hybrid cars now make up some 5.4 per cent. And electric cars? A dismal 0.39 per cent, with just 282 registered so far this year.
According to the Society of the Irish Motor Industry (SIMI) which has compiled these figures into its regular quarterly report, the fall-off in diesel sales means that Ireland's vehicle CO2 emissions are rising, up by a calculated 1.4 per cent so far this year.
One bright spot was van registrations - LCV (Light Commercial Vehicles) saw a growth of 5.3 per cent in sales, helped by the fact that, overall, the Irish economy is doing rather better this year and employment is on the up.
In other good news, the SIMI Report highlights a number of price decreases in the cost of motoring. The average price of a new car in Q1 2018 was 1.9 per cent lower than a year earlier; interestingly consumers are spending more on higher specification cars with the average OMSP (Open Market Sales Price) up 4.1 per cent on Q1 last year. The cost of Motor Insurance in March 2018 was 13.8 per cent lower than it was a year earlier; however average Motor Insurance costs in March were 37 per cent higher than in March 2013. While the cost of fuel decreased slightly in Q1 of 2018 with Petrol prices down 0.7 per cent and diesel prices down 0.5 per cent last year.
But the Brexit effect, and worries over both the emissions from, and the future value of, diesel cars are still clearly weighing heavily on Irish car buyers. Jim Power, Economist and author of the SIMI Report said: "It is clear that Brexit uncertainty and used imports from the UK continue to exert pressure on the domestic new car market. Looking forward to the remainder of 2018, the other economic fundamentals that underpin new car registrations look set to remain positive. Used imports from the UK, though, are likely to remain a significant feature of the market and will undoubtedly displace new car sales once again. The surge in used imports from the UK effectively means that UK used car values are directly impacting on the values of domestic second-hand car stock, and this is making the cost of change to a new car more expensive which is also serving to undermine new car sales."
Alan Nolan, Director General, SIMI commented: "The further fall in new car sales this year really couldn't have come at a worse time from an environmental viewpoint, just as we are beginning to benefit from a wider range of Electric and Hybrid cars, at the very start of our transition to 2045 when it is projected that the entire fleet should be Zero emitting. The fall in Irish used car values due to the huge increase in imported used car volumes, as a knock-on from the weakening of Sterling resulting from Brexit, has made the cost to trade-up more expensive and has slowed-down our new car sales.
"It is crucially important that our used car values, and particularly diesels which represent 70% of our newest used cars, remain high, Brexit notwithstanding, as trade-in values will be key in ensuring that we can deliver on improving our future carbon and air quality performance from transport. Stable trade-in values will be crucial in relation to our ability to renew the national fleet and increase the penetration of Zero and Lower emitting cars. With all of this we remain confident that such new and nearly-new diesel used cars will continue to hold good values, as diesel remains the workhorse for business and those in rural Ireland. The reduction that we have seen in the diesel share of the new car market may potentially leave these in shorter supply for those buyers for whom they are the best transport and environmental option at present, which you would expect to have a positive upward pressure in relation to future values."